The two most common forms of defined benefit scheme are: ‘final salary’ schemes and ‘career average revalued earnings schemes’ (CARE schemes)

Both types of scheme use your pensionable salary as one part of the formula in order to calculate your pension, but there is a significant difference between the two. We explain in clear terms what these differences are.

It is not true that defined benefit schemes provide a guaranteed retirement pension.

The pension benefit paid will depend upon many factors, with the most important being the scheme’s ability to pay benefits to members as they fall due. If the employer’s business fails, it is likely that benefits will be reduced for some, if not all members (although Public Sector schemes are different in this respect). This Factsheets provides essential reading so you understand what your scheme can - and can’t - do.

To find out more, choose one of our free Factsheets on the right to match your category of membership.